think about it like this
If I sold $20 bills for $10
and said to you
"I can't wait to hear your thesis when i get to 14b in revenue"
What would you say?
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Hi, I’m a short seller
- Thread starter ShortSeller
- Start date
think about it like this
If I sold $20 bills for $10
and said to you
"I can't wait to hear your thesis when i get to 14b in revenue"
What would you say?
No. That isn't thinking. You are not contributing to any intelligent discussion of ASP, GM or COGS etc.
The excuse for holding back the $35k Model 3 is the same excuse for holding back the $59k Model S: the higher priced, and higher margin models demand meets or exceeds the supply of those models. When you are going to understand basic supply and demand microecon 101?
Tesla Kills The Entry-Level, 40 kWh Model S Citing Poor Demand
If their supply grows enough, maybe they will pull that demand lever, but may they never need to.
Why the obsession with the $35k model availability which seems to offer zero support for a short thesis anyway?
Esme Es Mejor
Member
That’s not an ad hominem attack; hopefully you take notice. His attack was on @Reality not discussing ASP, GM, or COGS. That’s an attack on the argument, not on the person— therefore, not ad hominem. Likewise, he attacked your obsession with the $35k version, not you personally. Again, not ad hominem.
I also cannot wait for Tesla starting to sell 35k cars.
You do realize Tesla will do that only when they are making money on that car, which also means they are at 25% margin on a very conservative $45k ASP.
Yeah, can't wait.
K_Dizzle
Member
I’m not sure you understand that Tesla is bigger than Elon. When things are running best Elon will probably be working the least
Chickenlittle
Banned
Most curious to know how you continue to review build quality? I own model3 and have zero issues with it or build. Currently have had it for 4 months. Now I realize you’ll claim I just got lucky and got the one perfect car but I don’t believe that. Got my invite to get my AWD drive version one week after others. Try an experiment. Call tesla line to ask question about model 3. Demand so high I suspect you will be put on long hold. Not many share your concern
I got lucky too, with that one perfect car..
N5329K
Active Member
"The more you know about any particular subject, the less reliable media reporting on that subject will appear."
Especially when it's egregiously dim, as is this opinion piece.
Robin
N5329K
Active Member
In this case, EM has done the math for us when he said, "selling base Model 3's now would kill the company."
It's one of the very few EM statements that seem utterly reliable.
Robin
Kenriko
Former Vendor
I also have a perfect Unicorn Model 3.. Amazing since they areeee sooooo rarreee.. /s
He said that, and note the use of the word "now". And yet, the shorts latch onto that statement and somehow claim that Tesla can't ever make a profit selling base Model 3s. It's exactly that deliberate misinterpretation (after being corrected already) that got @ShortSeller temporarily banned.
Why is this statement a surprise to anyone? Any company if they end up selling only the base model will go bankrupt one way or the other. This is true for Corolla or Civic. EM's statement is exactly in line with what he has been saying for years. Base model will be either a loss leader or zero profit, *even* when the production is humming at 10k a week.
So they need to achieve a good production rate *and* most importantly make it run like a well oiled machine before they can break-even on the base model.
This is mass production 101. The shorts know this very well. But ShortSeller here and everywhere is trying to create a FUD around this statement. This is exactly the kind of lies and deceit that gets them banned.
The moral compass of all shorts is highly suspect for the same reason.
Tl;dr; when you're only selling 1/3 the target volume, it's good the sell the widgets that bring in 3x as much, but that doesn't mean the lower cost widgets are not profitable.
Stating that you can not fully fund the new production line nor company by selling the lowest cost product at 1/4 to 1/3 the planned production rate does in no way imply the product is a loss leader or at zero profit. Rather, the point of the automation of the 3 line and its design is to cut costs far enough to make 3 SR RWD a profitable car.
S was claimed to have a 30k marginal cost back in the day (possibly the 60kWh pack). I think 3 SR will be GM positive once the line is at rate (correct amount of amortized fixed cost).
Similar threads
